FAQ
| ALTA | AOL | |
|---|---|---|
| Full Title Insurance for the Life of the Loan up to 30 years (1) | ||
| Coverage for loans up to $1 Million Dollars (2) | ||
| Fraud Coverage | ||
| Lien and GAP Coverage | ||
| Endorsement 8.1, Environmental Protection Lien | ||
| Includes Standard Endorsements with Custom Endorsements Available | ||
| Fully Regulated (3) | ||
| Single Issue Policy for Both Lender and Borrower | ||
| Integrated Closing Protection Letter | ||
| Buyback Coverage | ||
| Significant Cost Savings |
REGULATORY REQUIREMENTS BY FHFA, CFPB, FNMA, FHLMC, FHA, VA AND GNMA
These are minimum requirements to comply with statues in order to sell, trade and otherwise conduct business with the agencies for mortgage loans which may or may not be sold to the agencies or secondary market for each Attornely Opinion Letter (AOL):
- Be addressed to the lender and all successors in interest of the lender.
- Provide the following statement: We [I] agree to indemnify you and your successors in interest in the [mortgage] [deed of trust] opined hereto, to the full extent of all losses attributable to a breach of our [my] duty to exercise reasonable care and skill in the examination of the title and giving of this opinion.
- Provide the gap coverage for the period of time between the loan closing and the recordation of the mortgage.
- State that the title condition of the property is acceptable and the mortgage constitutes a lien of the required priority on a fee simple estate in the property.
- List other liens and state that they are subordinate
- Be given by an attorney licensed to practice law in the jurisdiction where the subject property is located. The attorney must also be insured against malpractice in rendering opinions of title in an amount commonly prevailing in the jurisdiction, taking into account the volume of opinions rendered by the attorney.
- Be commonly acceptable in lieu of title insurance by private institutional mortgage investors in the area where the subject property is located.
- Include language relating to the coverage normally provided by ALTA Endorsement 8.1 (Environment Protection Lien). Section (a) of the endorsement insures that there are no environmental protection liens filed in the public records that have priority over the lien of the insured mortgage; Section (b) insures that there are no state statutes that provide that liens filed after the date of the policy would have priority over the lien of the insured mortgage. An attorney may include an exception for possible subsequent super liens that could take priority over the mortgage only if the subject property is located in a state whose state statutes provide for such a super lien.
Include the following if the loan is an ARM:
- The law of the state in which the property securing the mortgage is located provides that (i) the lien of the mortgage will not become invalid or unenforceable resulting from provisions in the mortgage that provide for changes in the interest rate calculated pursuant to the formula provided in the mortgage, and (ii) priority of the lien of the mortgage for the UPB of the loan, together with interest as changed and other sums advanced by the noteholder in accordance with the provisions of the mortgage, will not be lost as a result of changes in the rate of interest calculated pursuant to the formula provided in the mortgage.
Include the following if the loan is secured by a unit in a PUD:
- There is no present violation of any restrictive covenants that are in the PUD constituent documents and restrict the use of the land or the forfeiture or reversion of title,
- All dues applicable to the subject property are current and not delinquent, and
- No recorded right of first refusal to purchase the land was exercised or could have been exercised on or before the closing date of the loan and the undersigned is unaware of the existence or the exercise of any right of first refusal on or before the closing date of the loan.
- Not take exception to survey matters. In addition, the opinion must not be subject to any title exceptions other than those set forth in B7-2-05, Title Exceptions and Impediments.
Insurance products are regulated by the state that the policy is issued by the State Department of Insurance. Attorney's are regulated by the state(s) they are licensed in and the the BAR(s) that they are accepted into.
An attorney opinion letter, also known as a title opinion or opinion of title, is a legal document provided by a qualified state-specific real estate attorney. The AOL offers a professional analysis of a property's title records, identifying potential issues or defects. It concludes with the attorney's determination the title is clear and marketable, thereby assuring buyers, lenders, and other parties involved in the transaction that the real estate transaction may move forward, and an insurance policy designed to indemnify the homeowner and lender against potential losses arising from title defects, further protecting their interests
Title insurance is indemnity insurance that protects against financial loss from defects in the title to real property and the invalidity or unenforceability of mortgage loans. It is commonly used in real estate transactions to protect the buyer and the lender.
Both the homeowner and lender can rest comfortably knowing their insurance policies are backed by an A-rated underwriter, as rated by AM Best.
The American Land Title Association (ALTA) has tried to state that AOLs do not cover Fraud. Not only does an insured attorney opinion letter cover fraud, but our Closing Protection Letter (CPL) provides coverage for an entire year longer than what ALTA title insurance provides. So, YES, AOLs protect against FRAUD.
Yes, coverage is no different than the traditional ALTA insurance policy. Insured Attorney Opinion Letter policies are subject to complete research of public records, which is no different from ALTA insurance policies. The same research confirming how the property is vested, open mortgages, liens, and property tax status is completed to the same level of scrutiny for an ALTA insurance policy. This assures the homeowner and lender that their interests are fully covered.
AOLs also provide full Gap insurance from the closing through document recording at the County.
In the unlikely event that a claim occurs, the process emulates the same method that has been followed historically for ALTA insurance products, with resolution/claim payment promptly.
Yes. The insurance carrier is licensed and regulated in all 50 states. The attorney who generates the AOL is also licensed in the state where they practice.
Residential purchase and refinance transactions of up to 1 million dollars are insurable in all 50 states.
